PROBLEMS AND PRIORITIES FOR PREVENTING UNDECLARED LABOUR IN UKRAINE

Larysa Bogush ()
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Larysa Bogush: Institute for Demography and Life Quality Problems of the National Academy of Sciences of Ukraine, Ukraine

Three Seas Economic Journal, 2024, vol. 5, issue 1

Abstract: The purpose of the article is to identify the scale of undeclared labour in Ukraine and to study the problems, principles and prospects of its prevention in unstable socio-economic conditions. Methodology. In line with the EU and ILO methodology, the State Labour Service of Ukraine interprets undeclared labour as legal paid activity that is not fully or partially registered in accordance with the law. Results. Undeclared work plays an important role in the practice of business management and competitiveness stimulation in countries with industrial, neo-industrial and post-industrial economies, which has been developed almost since the middle of the 20th century. The paper proves that undeclared work is a broader concept that includes legalised (both official and manipulative) as well as shadowy mechanisms of its occurrence and functioning. Given the problematic performance by the State Labour Service of Ukraine of its inspection and sanctioning powers, as well as the widespread use of non-standard labour relations (with mediation in the performance of employer functions, outsourcing of auxiliary, service and some specialised personnel to companies), tariff-free remuneration systems encourage numerous manipulations in the area of labour declaration and decent wages. The source of problems with the spread of remuneration systems based on an assessment of the complexity of the work performed and the qualifications of employees, as well as with ensuring decent working conditions for agency (loan, temporary) workers, is the unclear legislative regulation of these systems. Practical implications. The priorities for preventing undeclared labour in Ukraine are: a consistent increase in the share of wages in the structure of production costs; strengthening cross-control over the fulfilment of obligations to pay the minimum wage under the tariff-free and hourly wage systems; and the introduction of a sound methodology for harmonising the minimum wage, the subsistence minimum and other basic social standards linked to them. Value/Оriginality. The expediency of identifying institutionalised and manipulative mechanisms of undeclared labour, their formal and illegal bases is confirmed by the classification of the main forms of undeclared labour used by the EU, ILO and the State Labour Service of Ukraine; this approach will increase the complexity and effectiveness of systemic measures to regulate it (control, mitigation, prevention).

Keywords: undeclared labour; employment; wages; tariff-free remuneration systems; non-standard labour relations; socio-economic policy of Ukraine (search for similar items in EconPapers)
JEL-codes: J20 J38 J46 J78 J80 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bal:3seasj:2661-5150:2024:5:1:4

DOI: 10.30525/2661-5150/2024-5-4

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